Lifetime Asset Protection Trust – (Single People/Widows/Widowers or Couples)

Because of the inherent risks associated with an outright gift of assets many people find it preferable to transfer assets into trust. This has a number of advantages over an outright gift including:-

 

• A trust is a separate legal entity and the Trustees hold the assets for the benefit of the beneficiaries and not themselves personally, therefore, the assets held in trust are protected from personal liabilities such a their death, divorce or bankruptcy.
• You would be a beneficiary of the trust which is important in ensuring that the property continues to be exempt from capital gains tax
• Your right to occupy the property can be preserved

 

This type of trust can still be caught by the Deprivation of Assets Rules and the Notional Capital rule if the Local Authority can prove that the assets were transferred into trust to avoid the payment of care fees that you knew were “on the horizon” due to failing health or increasing incapacity. As stated earlier, if you are in good health and there is no immediate prospect of you needing care then this is an attractive option as the Deprivation of Assets Rules are likely to be avoided.

 

The use of a trust in this way by either individuals or couples does give you the potential to protect the full value of property and assets placed into the trust.



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